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Measure B1: Unfair, Unlawful, Unnecessary

As the person who originated the concept of square footage taxation in 1980, I am writing to urge voters to oppose the Alameda Unified School District’s Measure B1 on the November ballot.

Measure B1 is a regressive tax which worsens the unfairness imposed by Proposition 13, and it is likely unlawful under current statute and it is unnecessary as the current tax does not expire until 2019.

In 1978 Proposition 13 wrote into the California constitution a prohibition against new taxes based on the value of property. At that time two-thirds of property tax income came from business property, now less than 30 percent comes from business property.

In response to Proposition 13 I created the City of Berkeley’s Library Relief Tax of 1980 (revised in 1988) where business property is taxed at a 50 percent higher rate than residential property. Although this structure still exists in Berkeley, the State of California has since legislated that new taxes must have a “uniform” rate.

Alameda’s Measure B1 turns Berkeley’s progressive response to Proposition 13 on its head and makes the business-residential property split even worse. Since residential and commercial property must be taxed at the same rate (by current state law), Measure B1’s imposition of a maximum tax for large properties, a “cap,” is a Proposition 13-like gift to large corporations.

While residents and small businesses pay 32 cents per square foot, Alameda’s largest shopping center pays about 1 cent per square foot. For example: Alameda’s new Target store is 140,000 square feet. If no cap existed it would pay almost $45,000 per year to Alameda’s schools. But, because of the cap, it will pay only $7,999 per year, a rate of less than 6 cents per square foot.

The California Court of Appeal said that a previous Alameda tax, Measure H, was not uniform and the school district was on the hook for millions in refunds and legal fees. The current tax, Measure A, which expires in 2019, was sustained by the lower Superior Court, as was Measure H. But the current tax, Measure A was never taken to the Court of Appeal unlike Measure H which, almost certainly, would have ruled against it for the same reason, lack of uniformity. Unfortunately, the Court of Appeal’s decision on Measure H came significantly after Measure A’s Superior Court victory meaning it was too late to appeal the decision. But going forward, new taxes must be uniform.

Although Measure H was technically structured differently than Measures A and B1, the substance of the measures and the principal of uniform taxation is the same. The cap, in effect, creates different rates of taxation which is unlawful.

Finally, Measure B1 treats public charter schools and their students as second-class citizens by funding them at a lesser rate. This is also against state law, but charter schools, already marginalized, have been hesitant to raise their voices, let alone seek legal remedies.

I created square footage taxation to try to right some of the wrongs of Proposition 13 by creating a fair progressive tax. Measure B1’s regressive structure enhances corporate tax loopholes imposed by Proposition 13.

Measure A does not expire until 2019. Therefore, defeating Measure B1 does not put school funding in jeopardy. Defeating B1 would give the school district two years and elections in June and November of 2018 to offer Alamedans a progressive and fair choice.

B1 is unfair, unlawful and unnecessary. Please vote “no.” As the ballot argument that Mayor Trish Spencer and I signed says, “Eliminate the cap and we will support it.”